Airbnb Posted A Profit Of $1.9 Billion, Air India And Largest Commercial Aircraft Deal In Aviation History| FXMAG.COM

Profits
Pandemic and economic problems vs Airbnb
Improvement of the situation
Airbnb share price
The deal
Boeing share price

Airbnb posted its first ever annual profit last year. Air India Ltd. has ordered 470 jets from Boeing Co and Airbus.

Profits

The short-term rental company posted a profit of $1.9 billion, slightly beating analyst estimates and its own prior projections, and up 24% from the fourth quarter of 2021. Full-year revenue increased 40% to $8.4 billion. Fourth-quarter profit of $319 million far exceeded analysts' consensus estimate of $171 million.

The company said it earned $103 million in interest from its own cash and customer funds in the fourth quarter, up from just $4 million a year earlier. This is equivalent to almost a third of the company's total profit for the quarter.

The company said it added 900,000 listings in 2022, excluding China, bringing the global total to 6.6 million. In an effort to increase revenue, Airbnb is increasingly focusing on adding more hosts to its platforms.

Pandemic and economic problems vs Airbnb

The pandemic has changed the Airbnb business. Guests have started booking longer stays by working remotely. Short-distance trips have also increased, while stays in urban centers have initially been successful. Airbnb said stays of 28 or more nights accounted for 21% of booked nights in the fourth quarter, unchanged from the previous year.

Advertising

Airbnb has also become an unlikely beneficiary of rising interest rates, investing its customers' cash in money market funds and other short-term securities, whose returns have skyrocketed over the past year.

Improvement of the situation

Airbnb said it benefited from strong demand for travel despite concerns about high inflation and a recession. Americans took advantage of the strong dollar to fly overseas, and European intercontinental travel increased.

Airbnb hosts have experienced a growing demand for city center stays, the company said. This was a weak spot earlier in the pandemic and was another sign that travel patterns continued to normalize.

Airbnb share price

Airbnb's share price rose 41% from the start of the year to Tuesday afternoon, recouping some of the losses lost last year. The company's shares have fallen by about half in 2022.

In mid-2022, the stock fell below 90.00, but it was not the lowest level. At the end of 2022, Airbnb recorded a stock price low of 82.49. With the new year, prices started to rise and are currently at 120.87, the highest level in over 4 months.

The deal

Air India Ltd. said it had agreed to purchase 250 Airbus aircraft and 220 Boeing aircraft, surpassing a 460 aircraft deal made by American Airlines in 2011. The deal aims to provide more aircraft to suppliers to India, expected to be the fastest growing major aviation market in the world.

Advertising

Boeing orders, based on aircraft list prices, totaled $45.9 billion, including options. Airbus no longer lists list prices for its jets. Based on analyst estimates, the total value of the deal was around $85 billion before discounters. The previous record – a Boeing 777X order from 2013 by Emirates Airlines – was worth around $75 billion. Airlines usually don't pay list prices, instead taking advantage of large, undisclosed discounts.

Buoyed by an agreement with Air India, Airbus plans to increase production rates for its two largest models in an attempt to capitalize on the revived demand for long-haul travel. Boeing has pushed back a planned production increase due to supplier shortages, though it still hopes to increase production this year.